Tokyo Stocks Slide, Dollar Falls Vs. Yen

Published 7:00 pm, Thursday, January 23, 2003

Tokyo stocks closed lower Friday, bogged down by falling shares of Sony and Toyota despite Wall Street's rebound overnight from a five day decline. The dollar weakened against the yen and fell to fresh two year lows against the euro.

The benchmark 225-issue Nikkei Stock Average lost 59.27 points, or 0.67 percent, to close at 8731.65. On Thursday, the index climbed 179.88 points, or 2.09 percent, to 8,790.92.

The dollar bought 117.85 yen at 5 p.m. (3:00 a.m. EST) Friday, down 0.37 yen from late Thursday in Tokyo and also below its late New York level of 118.06 yen overnight.

The euro surged to $1.0784 late Friday in Tokyo, highest level in Asian trade since October 1999. It traded at $1.0722 late Thursday in Tokyo.

On the stock market, the Nikkei swung lower as investors ignored Wall Street's gains and sold technology bellwether Sony, automaker Toyota Motor and other blue chips to book profits from recent gains. After the early selling abated, share prices waffled in and out of negative territory before sinking again at the end of trading.

Even Fujitsu, which initially resisted the trend to post early gains, finished weaker. Japan's biggest computer maker had got a boost after announcing Friday an alliance with U.S. computer chip maker Intel Corp. in develop Linux-based servers.

Traders said banks and other corporate investors who dominate the market were also trimming their stockholdings to limit losses ahead of the March 31 end of the fiscal year. The yen's strength also hurt many blue chip exporters, they said.

A stronger yen makes Japanese exports more expensive in other markets and crimps corporate profits by lowering the value of revenues earned overseas when converted to yen.

On the first section of the Tokyo Stock Exchange, 692 issues fell, 636 issues ended higher and 164 were unchanged from Thursday.

Volume was unchanged from Thursday at an estimated 1.07 billion shares.

The broader Tokyo Stock Price Index of all issues on the exchange's first section fell 4.07 points, or 0.47 percent, to finish at 866.10. The TOPIX gained 11.37 points, or 1.33 percent Thursday.

On Wall Street Thursday, stocks snapped a five day losing streak, swinging modestly higher after positive earnings from companies such as Texas Instruments enticed investors to pick up bargains.

Still, investors remained divided over whether to buy stocks amid concerns about a possible war with Iraq.

In currency markets, the dollar remained weak against most currencies, after being stung overnight by the Russian central bank's plans to reduce its dollar reserves. The dollar currently makes up more than half of the Russian central bank's $47.9 billion in gold and foreign exchange reserves.

The euro bought 127.07 yen late Friday in Tokyo, up from 126.80 yen late Thursday.

The yield on the benchmark 10-year government bond rose to 0.8100 percent late Friday, from 0.8000 percent late Thursday. Its price fell 0.09 to 100.82.